Biotech stocks push higher

TedGriffith

NEW YORK (CBS.MW) - Biotechnology stocks rose for the second straight session Monday, with shares of ImClone Systems among the gainers after the company said its experimental cancer treatments produced "positive" results in early-stage testing.

The Amex Biotechnology Index
BTK, +1.13%
increased 3.4 percent and the Nasdaq Biotechnology Index
NBI, +0.65%
gained 4.5 percent. Both indexes also closed higher Friday. Even with the past two sessions' gains, however, both indexes are down substantially since the beginning of the year.

Biotechnology stocks got a boost Monday from news out of the pharmaceutical sector, said Michael Becker, an analyst with Wayne Hummer Investments. News reports Monday said Johnson & Johnson
JNJ, +1.24%
planned to buy drugmaker Alza Corp.
AZA, +1.79%See full story. The possibility of an Alza buyout, seems to have fed hopes for acquisitions in the biotech sector, Becker said.

"News like this puts acquisitions into people's minds," Becker said. "It rekindles expectations for consolidation in the biotech sector."

Becker said the meeting of the American Association for Cancer Research in New Orleans also gave biotech shares a lift because companies were using the conference to announce progress on the development of new cancer treatments.

ImClone Systems was one of the biotechs that highlighted its development efforts at the meeting.

ImClone said both its colorectal cancer drug, IMC-C225, and its skin cancer vaccine produced promising results in preclinical testing. The vaccine and drug are still in the testing phase of development.

While the testing results were encouraging, ImClone is one of many biotechs working on new cancer treatments and the company faces the prospect of strong competition when its products ultimately reach the market, Becker said.

"It is a tough competitive landscape," the analyst said.

Elsewhere, shares of Immunex
IMNX
recovered a little of the ground they lost last week, adding 63 cents to $12.25. Immunex stock plunged Friday after the Seattle-based company said it had halted clinical testing of its drug Enbrel as a potential treatment for congestive heart failure. Immunex already sells Enbrel as a treatment for rheumatoid arthritis.

Shares of Human Genome Sciences
HGSI
edged up 50 cents to $43.69. Human Genome Sciences' stock posted significant gains Friday after the Rockville, Md.-based company said it started the first phase of patient testing of Albuferon for treatment of hepatitis C, a virus that causes liver damage. Typically, companies must successfully complete three phases of patient testing before they can seek government clearance to sell their products.

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